State Income Tax Rates 2026: All 50 States Compared
The gap between the highest and lowest state income tax burdens is now 13.3 percentage points — the difference between California's top rate and the nine states that levy nothing at all. For a high-income household, that's a six-figure annual difference. But "no income tax" doesn't mean "no taxes," and the states with the most aggressive income tax cuts in 2026 aren't always the ones with the lowest total burden. This guide gives you the actual numbers for all 50 states, the 2026 rate changes that took effect January 1st, and a framework for thinking about what state income tax really costs you.
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Key Takeaways
- • 9 states have zero income tax in 2026 — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming
- • 8 states cut rates effective January 1, 2026 (Indiana, Kentucky, Mississippi, Montana, Nebraska, North Carolina, Ohio, Oklahoma)
- • California leads at 13.3%; Hawaii (11%), New York (10.9%), and New Jersey (10.75%) follow — all applying only to top-bracket income
- • 15 states use single-rate structures in the Tax Foundation count; Ohio and Mississippi still need zero-bracket caveats
- • Top marginal rate is misleading — effective rates for median-income households are far lower in every high-tax state
June 2, 2026 source check
This page was rechecked against Tax Foundation 2026 all-state rate data, Tax Foundation's 2026 state tax-change review, and official state sources where the all-state survey needed a post-publication caveat. For state-specific filing or withholding decisions, use the linked state calculator and verify with that state's revenue department.
- Tax Foundation 2026 state income tax rates and brackets — All-state top marginal rates, single-rate structures, no-income-tax states, and bracket notes.
- Tax Foundation 2026 state tax changes — January 1, 2026 individual income-tax reductions and Ohio single-rate transition.
- South Carolina Act 110 / H.4216 — Official 2026 South Carolina 1.99% / 5.21% formula and South Carolina Income Adjusted Deduction.
- Iowa Department of Revenue 2026 rate notice — Official confirmation that Iowa uses a 3.8% flat individual income-tax rate for 2026.
The 2026 State Income Tax Landscape at a Glance
According to the Tax Foundation's 2026 State Income Tax Rates and Brackets review, 41 states levy a broad-based individual income tax. Of those income-tax states, 15 use single-rate structures; 26 states plus the District of Columbia use graduated brackets where the rate increases with income. The trend toward single-rate income taxes is accelerating: multiple states have recently moved from graduated to flatter systems, and a handful of low-rate states are on a legislatively scheduled glide path toward lower rates or zero.
Eight states implemented income tax rate reductions on January 1, 2026, according to the Tax Foundation's 2026 State Tax Changes report. This reflects a broader competitive pressure: states that border no-income-tax or low-income-tax states face ongoing pressure to reduce rates to retain high-income residents and mobile businesses. The Tax Foundation ranks states on an overall "State Business Tax Climate Index" that weights income taxes heavily, but also accounts for sales tax, property tax, and unemployment insurance taxes.
States With No Income Tax (9 States)
The nine states that levy no income tax in 2026 are: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
New Hampshire completed its exit from income taxation effective January 1, 2025. The state had taxed dividend and interest income for decades; its final elimination brought it fully into the no-income-tax club. Tennessee had already completed a similar transition in 2021, eliminating its "Hall Tax" on investment income.
Two important caveats about "no income tax" states:
- Washington state levies a 7% capital gains excise tax on long-term capital gains above $250,000 per year (confirmed constitutional by the Washington Supreme Court in 2023). It is technically not an "income tax" under the state's constitution, but it functions as one for high earners with investment income.
- New Hampshire has among the highest property taxes in the nation — the 3rd highest effective property tax rate per the Tax Foundation — which is partly how the state funds schools and services without income or sales tax revenue.
For a comprehensive look at these states and their total tax picture, see our guide to states with no income tax.
High-Tax States: Top Marginal Rates in 2026
The states with the highest top marginal income tax rates in 2026, per the Tax Foundation:
| State | Top Rate | Income Threshold | Structure |
|---|---|---|---|
| California | 13.3% | $1M+ | 9 brackets (+ 1% surcharge) |
| Hawaii | 11.0% | $200,000+ | 12 brackets |
| New York | 10.9% | $25M+ | 9 brackets |
| New Jersey | 10.75% | $1M+ | 7 brackets |
| Oregon | 9.9% | $125,000+ | 4 brackets |
| Minnesota | 9.85% | $183,341+ | 4 brackets |
| Massachusetts | 9.0% | $1M+ indexed threshold | 5% base + 4% surtax |
| Vermont | 8.75% | $204,000+ | 5 brackets |
| Wisconsin | 7.65% | $374,600+ | 4 brackets |
| Maine | 7.15% | $64,849+ | 3 brackets |
Iowa is no longer a high-rate graduated state: the Iowa Department of Revenue confirms a 3.8% flat rate for 2026. South Carolina also needs a current-year caveat: older 6.4% and 6.5% bracket tables are stale for 2026 planning after H.4216.
A critical point that media coverage routinely misses: top marginal rates apply only to the income above the threshold — not to all income. A California resident earning $150,000 pays the 13.3% rate on zero dollars; their income falls in lower brackets. The effective California income tax rate for someone earning $150,000 is roughly 7–8%, not 13.3%. The income tax calculator can show you the actual marginal vs. effective rate breakdown for any income level.
Single-Rate Income Tax States in 2026
Tax Foundation counts 15 states with single-rate individual income tax structures in 2026. "Single-rate" is more precise than "flat" because several states still have zero brackets, exclusions, personal exemptions, or local income taxes that change the real household result. Proponents argue single-rate taxes are simpler and more growth-friendly. Critics argue they are less progressive than graduated systems. Here are the 2026 single-rate states:
| State | 2026 Rate | 2025 Rate | Important caveat |
|---|---|---|---|
| Arizona | 2.50% | 2.50% | Single state rate; deductions and credits still matter |
| Colorado | 4.40% | 4.40% | Federal-standard-deduction starting point |
| Georgia | 5.19% | 5.39% | Rate declined during 2025 phase-down |
| Idaho | 5.30% | 5.30% | Threshold and deductions affect taxable base |
| Illinois | 4.95% | 4.95% | Flat state rate after exemption rules |
| Indiana | 2.95% | 3.00% | County income taxes can add materially |
| Iowa | 3.80% | 3.80% | Official IDR notice confirms 2026 flat rate |
| Kentucky | 3.50% | 4.00% | Local occupational taxes may apply |
| Louisiana | 3.00% | 3.00% | Single state rate after 2025 reform |
| Michigan | 4.25% | 4.25% | Some cities impose local income tax |
| Mississippi | 4.00% | 4.40% | Applies above $10,000 of taxable income |
| North Carolina | 3.99% | 4.25% | Final step in scheduled phase-down |
| Ohio | 2.75% | 3.125% | Applies to nonbusiness income above $26,050; local taxes often apply |
| Pennsylvania | 3.07% | 3.07% | Local earned-income and wage taxes can dominate |
| Utah | 4.50% | 4.50% | Taxpayer credit affects effective rate |
Ohio's change is the most structurally significant of 2026. The state moved to a 2.75% single-rate tax on nonbusiness income above $26,050. Income at or below that threshold remains untaxed at the state level, and municipal income taxes can still change the paycheck result.
Massachusetts is sometimes described as a flat-tax state because ordinary income starts with a 5% rate, but the 4% surtax on high taxable income creates a 9% top rate for the highest earners. This is why the Tax Foundation treats Massachusetts as a two-bracket state rather than one of the 15 single-rate states in the table above.
For exact flat-rate calculations, open the state calculator instead of relying on the headline rate alone. The Illinois income tax calculator applies the 4.95% rate after the 2026 $2,925 personal exemption and flags retirement-income, property-tax credit, and reciprocity details that a simple flat-tax table cannot show.
The 8 States That Cut Income Tax Rates in 2026
Eight states implemented individual income tax rate reductions effective January 1, 2026, according to the Tax Foundation's 2026 State Tax Changes analysis. This is the most notable legislative development in state income taxation this year:
| State | Change | Notes |
|---|---|---|
| Indiana | 3.00% → 2.95% | Part of multi-year phase-down |
| Kentucky | 4.0% → 3.5% | Continuing phase-down |
| Mississippi | 4.4% → 4.0% | Scheduled 3.75% rate for 2027 |
| Montana | 5.90% → 5.65% | Top bracket reduced; lower bracket remains 4.7% |
| Nebraska | 5.20% → 4.55% | Phasing down to 3.99% by 2027 |
| North Carolina | 4.25% → 3.99% | Final step in phased reduction plan |
| Ohio | 3.125% → 2.75% | Single-rate structure on nonbusiness income above $26,050 |
| Oklahoma | 4.75% → 4.5% | Competitive positioning vs. Texas |
Mississippi's long-term trajectory is one of the most aggressive: the state has paired near-term rate reductions with further scheduled or triggered reductions. Treat published phase-out dates carefully, because future reductions depend on the enacted schedule and revenue triggers in force for that tax year.
Complete 50-State Income Tax Reference Table
The table below shows top marginal rates for single filers in each state. For graduated states, the bottom bracket rate is also shown. Check your state's revenue department for complete bracket tables, as thresholds vary by filing status (single vs. married filing jointly).
| State | Top Rate | Structure | 2026 Change? |
|---|---|---|---|
| Alabama | 5.0% | 3 brackets | — |
| Alaska | 0% | No income tax | — |
| Arizona | 2.50% | Single rate | — |
| Arkansas | 3.90% | Graduated | — |
| California | 13.3% | 9 brackets + surcharge | — |
| Colorado | 4.40% | Single rate | — |
| Connecticut | 6.99% | 7 brackets | — |
| Delaware | 6.6% | 7 brackets | — |
| Florida | 0% | No income tax | — |
| Georgia | 5.19% | Single rate | ↓ from 5.39% |
| Hawaii | 11.0% | 12 brackets | — |
| Idaho | 5.30% | Single rate | — |
| Illinois | 4.95% | Single rate | $2,925 exemption |
| Indiana | 2.95% | Single rate | ↓ from 3.00% |
| Iowa | 3.80% | Single rate | — |
| Kansas | 5.58% | Graduated | — |
| Kentucky | 3.50% | Single rate | ↓ from 4.00% |
| Louisiana | 3.00% | Single rate | — |
| Maine | 7.15% | 3 brackets | — |
| Maryland | 5.75% | 8 brackets + local tax | — |
| Massachusetts | 9.0% | Flat 5% + 4% surcharge on $1M+ | — |
| Michigan | 4.25% | Single rate | — |
| Minnesota | 9.85% | 4 brackets | — |
| Mississippi | 4.00% | Single rate above $10,000 | ↓ from 4.40% |
| Missouri | 4.7% | 10 brackets | — |
| Montana | 5.65% | 2 brackets | ↓ from 5.90% |
| Nebraska | 4.55% | Graduated | ↓ from 5.20% |
| Nevada | 0% | No income tax | — |
| New Hampshire | 0% | No income tax (since 2025) | — |
| New Jersey | 10.75% | 7 brackets | — |
| New Mexico | 5.9% | 4 brackets | — |
| New York | 10.9% | 9 brackets | — |
| North Carolina | 3.99% | Single rate | ↓ from 4.25% (final) |
| North Dakota | 2.5% | 2 brackets | — |
| Ohio | 2.75% | Single rate above $26,050 | ↓ simplified |
| Oklahoma | 4.5% | 4 brackets | ↓ from 4.75% |
| Oregon | 9.9% | 4 brackets | — |
| Pennsylvania | 3.07% | Single rate | — |
| Rhode Island | 5.99% | 3 brackets | — |
| South Carolina | 5.21% | H.4216 two-rate formula | New 2026 structure |
| South Dakota | 0% | No income tax | — |
| Tennessee | 0% | No income tax | — |
| Texas | 0% | No income tax | — |
| Utah | 4.50% | Single rate | — |
| Vermont | 8.75% | 5 brackets | — |
| Virginia | 5.75% | 4 brackets | — |
| Washington | 0% (7% CGT) | No income tax; capital gains tax | — |
| West Virginia | 4.82% | 5 brackets | — |
| Wisconsin | 7.65% | 4 brackets | — |
| Wyoming | 0% | No income tax | — |
Local Income Taxes: The Hidden Layer
State income tax rates are only half the picture. Many states allow cities and counties to impose their own income taxes, which can add materially to the total burden — and these local rates rarely get mentioned in "state income tax" comparisons.
Notable examples:
- New York City: NYC residents pay an additional 3.876% city income tax on top of New York State's rate, bringing the combined city + state + federal marginal rate to among the highest of any U.S. city. A high earner in NYC can face a combined federal, state, and city marginal rate exceeding 50%.
- Maryland: All counties and Baltimore City impose a local income tax between 2.25% and 3.2%. Maryland residents should always add the local rate to the state rate — the real state + local top rate for many Maryland residents is approximately 9%.
- Pennsylvania cities: Philadelphia imposes a 3.75% wage tax on residents (3.44% for non-residents working in the city). Many other Pennsylvania municipalities have their own earned income taxes under the Local Tax Enabling Act, typically 1–2%.
- Ohio municipalities: Despite Ohio's flat 2.75% state rate, cities like Columbus (2.5%), Cleveland (2.5%), and Cincinnati (1.8%) layer on substantial local income taxes.
- Indiana local taxes: Each county has its own county income tax rate (CAGIT/COIT), ranging from 0.5% to over 3%, collected on top of the 2.95% state single rate.
This local tax layer is why Pennsylvania's 3.07% flat state rate doesn't tell the whole story for a Philadelphia resident, and why Ohio's new 2.75% flat rate doesn't mean Columbus workers are paying 2.75%. Always calculate city and county taxes when evaluating a state's true income tax burden. You can compare your situation with our state tax comparison guide.
The Remote Work State Tax Problem
Remote work has created significant complexity in state income taxation. In theory, if you live in Florida and work remotely for a New York employer, you owe Florida income tax (zero) and no New York income tax — because you didn't perform the work in New York. In practice, New York aggressively applies the "convenience of the employer" rule: if you work remotely from outside New York for your own convenience (not because the employer required it), New York treats your remote wages as New York-source income.
Several states — including Connecticut, Delaware, Pennsylvania, Nebraska, and Arkansas — apply similar convenience rules. Others, like California, apply market-based sourcing that can require non-residents to apportion income to California. The result: a remote worker who lives in a no-income-tax state may still owe income tax to their employer's state, depending on the rules of that state.
For deeper analysis of this issue, see our guide to remote work state income taxes.
Relocation Savings: Does Moving to a Low-Tax State Actually Pay Off?
The income tax savings from relocating can be substantial for high earners — but the calculation is rarely as simple as multiplying your income by the tax rate difference. Consider a specific scenario: a married couple earning $500,000 combined, currently living in California, considering a move to Texas.
California income tax at $500,000 (married filing jointly): approximately $38,000–$43,000 annually, depending on deductions and specific income type. Texas income tax: $0. That's a potential annual saving of $38,000–$43,000.
But the offset calculation matters:
- Texas property tax rates average 1.74% effective rate per the Tax Foundation — among the highest in the nation. California's average effective property tax rate is 0.71%, constrained by Prop 13. On a $1.5 million home, the difference is roughly $15,000+ per year in additional property tax in Texas.
- Texas has no state income tax but has one of the highest combined state + local sales tax rates, averaging 8.19% per the Tax Foundation.
- California's Franchise Tax Board actively audits high earners who claim to have left the state. Establishing non-California domicile requires demonstrating you have genuinely changed your permanent home — updating voter registration, driver's license, professional licenses, and spending fewer than 546 days in California over any 24-month period.
For most high-income households, the income tax savings of moving to a no-income-tax state are real and substantial after accounting for offsets. For lower-income households, the offset from higher property and sales taxes can neutralize much of the income tax saving.
State Tax Treatment of Common Income Types
Not all income is treated the same way by every state. Several important variations:
Social Security Benefits
The federal government taxes up to 85% of Social Security benefits for higher-income recipients. Most states do not tax Social Security at all. In 2026, the eight states that tax Social Security to any degree are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont — though several provide significant exemptions for lower- and middle-income recipients.
Pension and Retirement Account Distributions
State treatment of IRA and 401(k) distributions varies widely. Illinois exempts all retirement income. Pennsylvania exempts distributions from IRAs and 401(k)s for taxpayers age 60 and older. New York excludes up to $20,000 of pension income for those 59½ and older. Michigan and Alabama provide generous pension exclusions. Other states, like California, fully tax retirement distributions at ordinary income rates.
Capital Gains
Most states tax capital gains as ordinary income — the same rate as wages. California taxes capital gains at its regular income tax rates (up to 13.3%), one reason high-earner investors face intense pressure to establish non-California domicile before selling appreciated assets. Arizona, Colorado, and a few others provide a small capital gains preference. For more detail, see our capital gains tax guide.
Frequently Asked Questions
Which states have no income tax in 2026?
Nine states levy no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire fully eliminated its tax on dividends and interest effective January 1, 2025. Washington technically has no income tax but levies a 7% capital gains tax on long-term gains above $250,000.
What state has the highest income tax rate in 2026?
California has the highest top marginal individual income tax rate at 13.3% — 12.3% base rate plus a 1% Mental Health Services surcharge on income exceeding $1 million. Hawaii is second at 11%, followed by New York at 10.9% and New Jersey at 10.75%. These high rates apply only to top-bracket income; effective rates for most residents are substantially lower.
Which states cut income taxes in 2026?
Eight states cut or simplified individual income tax rates effective January 1, 2026: Indiana, Kentucky, Mississippi, Montana, Nebraska, North Carolina, Ohio, and Oklahoma. Notable changes include Ohio moving to 2.75% on nonbusiness income above $26,050, Kentucky dropping to 3.5%, North Carolina dropping to 3.99%, Nebraska moving to a 4.55% top rate, and Oklahoma moving to a 4.5% top rate.
Do I pay state income tax where I live or where I work?
Generally both, but with credits to avoid double taxation. Your resident state taxes all your income. Your work state taxes income earned there. Most states provide a resident credit for taxes paid to other states. Some states have reciprocity agreements that eliminate the need to file in the work state.
What is a flat income tax state?
A single-rate income tax state generally applies one state rate after deductions, exemptions, or zero brackets. In 2026, the Tax Foundation counts 15 single-rate states: Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Mississippi, North Carolina, Ohio, Pennsylvania, and Utah. Massachusetts needs a separate caveat because its 4% surtax creates a higher top rate for high earners.
Are Social Security benefits taxed by states?
Most states do not tax Social Security benefits. Only eight states tax Social Security to any degree in 2026, and most provide significant exemptions based on income level. All nine states with no income tax automatically exempt Social Security.
How much can I save by moving to a no-income-tax state?
It depends on your income and current state. A California resident earning $300,000 might pay $20,000–$25,000+ in California state income tax annually. Moving to Texas or Florida eliminates that. However, Texas property taxes average 1.74% effective rate (vs. California's 0.71%), which partially offsets the savings. Run the full calculation including property and sales taxes.
See How Your State Stacks Up on Total Tax Burden
State income tax is just one dimension. Use our income tax calculator to estimate your complete federal and state tax picture — and compare what you'd pay in any state.
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